IA Innovation

Innovate UK (part of UK Research and Innovation) is the UK's innovation agency funding business innovation through grants, loans, and strategic programs. Following major restructuring in 2025, Innovate UK has shifted from open Smart Grants to targeted sector-specific funding, with £38.6 billion allocated for 2026-2030. The new approach focuses on eight priority growth sectors including advanced manufacturing, clean energy, digital tech, life sciences, and defense.

CRITICAL 2025 UPDATE: Smart Grants were paused in January 2025 with no Smart rounds planned for 2025/26. The new Growth Catalyst program (£100M) has replaced it, offering up to £900K per company with mandatory investor partnerships. This represents a fundamental shift toward later-stage, investor-backed innovations rather than early-stage open calls.

For ZHC builders, Innovate UK now offers substantial non-dilutive funding primarily through sector-specific competitions rather than open rounds. The UK's mature startup ecosystem provides significant R&D tax credits, patent box benefits, and access to world-class research institutions and Catapult centres.

2025/26 Program Structure

Growth Catalyst (Smart Grant Replacement)

• Up to £900K per company (max £2M project costs)
• Requires Innovate UK Investor Partner commitment
• Late-stage R&D and commercialisation focus
• Feasibility: £50K-£300K (up to 70% funded)
• Industrial Research: £100K-£1M (up to 70% funded)
• Experimental Development: £250K-£2M (up to 45% funded)
• Projects: 6-24 months duration
• Closing: February 3, 2026 (first round)

Innovation Loans

• £100K-£5M per project
• 100% of eligible costs (no match funding required)
• Below-market interest rates, long repayment periods
• Open year-round applications
• Focuses on health, net zero, digital tech, technology families

Biomedical Catalyst

• Up to £2M for health/healthcare SMEs
• 25-70% of eligible costs depending on company size
• Advanced therapies, digital health, diagnostics, medical devices
• Must be SME-led but can include larger partners

Sector-Specific Programs (2025/26)

• Battery Innovation: £20M available
• CAM Pathfinder (Connected/Automated Mobility): £35M
• Made Smarter Innovation: £15.5M for industrial digital
• Farming Innovation Programme: £4.8M for agri-tech
• DRIVE35 Scale-up: £150M for zero-emission vehicles

Eight Priority Growth Sectors (2026-2030)

1. Advanced Manufacturing (inc. batteries, aerospace)
2. Clean Energy Industries (net zero, sustainable tech)
3. Creative Industries (gaming, media, design)
4. Defence and Security Technologies
5. Digital and Technologies (AI, quantum, semiconductors)
6. Financial Services (fintech innovation)
7. Life Sciences (biotech, medtech, pharma)
8. Professional and Business Services

General Requirements

• UK registered business
• Innovation focus with commercial potential
• Match funding varies by program (0-70%)
• Strong IP strategy and route to market
• Economic benefits for UK
• Most programs require collaborative projects or investor backing

ZHC-Specific Fit

✅ Excellent for:

• Later-stage innovations with investor interest
• Sector-specific R&D (matches priority areas)
• UK market entry with strong commercial traction
• University spinouts with proven technology
• Industrial partnerships and scale-up projects
• Companies seeking £100K+ non-dilutive funding

❌ Poor fit if:

• No UK presence or incorporation
• Early-stage pre-revenue without investor backing
• No R&D component or pure services
• Cannot demonstrate clear route to market
• Seeking small amounts (<£50K) of open funding

Application Process 2025/26

Growth Catalyst Timeline

Stage	Duration	Details
Investor partner securing	2-4 months	Must have Innovate UK approved investor committed
Application preparation	80-100 hours	Comprehensive technical and commercial case
Expression of Interest	Before deadline	Investor partner must confirm support
Application submission	Rolling/Competitive	Closes February 3, 2026 (Round 1)
Assessment	2-4 months	Expert review and portfolio approach
Interview/Due diligence	1-2 months	For shortlisted projects
Grant offer	Upon approval	Conditional on investor funding completion
Project start	Defined windows	November 2025 onwards (varies by program)

Innovation Loans Process

1. Pre-application - Initial eligibility check and scope discussion
2. Application - Rolling basis, no fixed deadlines
3. Assessment - 2-3 months review period
4. Due diligence - Financial and technical review
5. Loan offer - Terms and conditions agreed
6. Drawdown - Funds released according to project milestones

Sector-Specific Competitions

• Each has unique timeline and requirements
• Typically 3-6 months from application to decision
• Rolling vs fixed deadline varies by program
• Check IUK Business Connect for current open calls

Key Changes from Smart Grants

What's Different:

• NO open, responsive funding rounds in 2025/26
• Mandatory investor partnerships for main programs
• Focus on later-stage, near-commercial projects
• Higher minimum project sizes (typically £100K+)
• Sector-specific rather than technology-agnostic
• Portfolio approach to selection (not just scoring)
• Integrated business growth support included

Success Factors:

• Strong investor relationships critical
• Clear commercial traction and market validation
• Alignment with UK Industrial Strategy priorities
• Realistic, milestone-based delivery plans
• Experienced management team
• Demonstrable economic impact for UK
• Export potential and scalability

Funding Timeline

• Paid in arrears - Spend first, claim quarterly
• Typical delay: 2-4 months between spend and reimbursement
• Alternative: Grants Advance Funding (up to 6 months early access)
• Project duration: 6-36 months depending on program
• Milestone payments: Linked to technical and commercial deliverables

Official Resources

• Innovate UK Business Connect
• Growth Catalyst Program
• Innovation Loans
• UKRI Opportunities
• Start-up Connect

Catapult Network (Specialized Facilities)

• Catapult Network - Access to facilities and expertise
• Digital Catapult
• High Value Manufacturing Catapult
• Medicines Discovery Catapult

Support Organizations

• British Business Bank
• Tech Nation
• UK Research and Innovation

Grant Consultancy (Application Support)

• GrantTree, MPA Group, FI Group, Ryan Innovation Funding
• Success rates: 2-3% for Smart (historical), 10-20% for targeted programs
• Application support cost: Typically 10-15% of grant on success